U.S. Employers Increase Use of Health Incentives

August 8, 2012 (PLANSPONSOR.com) - U.S. employers are increasingly relying on incentives to drive participation in health programs and encouraging employees and their families to take better care of themselves, according to a survey.

Aon Hewitt found 84% of employers now offer incentives for participating in a health risk questionnaire (HRQ), and nearly two-thirds (64 percent) offer an incentive for participation in biometric screenings. Half (51%) provide incentives to employees who participate in health improvement and wellness programs.

“Programs and tools like HRQs and biometric screenings can make employees more aware of their health status and of the opportunities to improve their health, but alone they won’t move the needle when it comes to health improvement and mitigating cost,” said Jim Winkler, chief innovation officer for Health & Benefits at Aon Hewitt. “Incentives solely tied to participation tend to become entitlement programs, with employees expecting to be rewarded without any sense of accountability for better health. To truly impact employee behavior change, more and more organizations realize they need to closely tie rewards to outcomes and better results rather than just enrollment.”

The use of monetary incentives, in particular, has increased dramatically over the past year. This year, 59% of employers used monetary incentives to promote participation in wellness and health improvement programs, up from 37% last year. The use of monetary incentives for participating in disease/condition management programs almost tripled this year, from 17% in 2011 to 54%.

Of companies that offer incentives, 58% offer some form of incentive for completing lifestyle modification programs, such as quitting smoking or losing weight. About one-quarter offer incentives for progress or attainment made towards meeting acceptable ranges for biometric measures such as blood pressure, body mass index, blood sugar and cholesterol.

Employers also are requiring more of participants in order for them to be eligible for enhanced benefits, such as value-based insurance designs (VBID). Of the 46% of organizations that incorporate some type of VBID approach in their health plans, nearly one in three require completion of a HRQ or require participation in a program such as disease management or smoking cessation programs to receive the enhanced benefits. This is a 33 percentage point increase from 2011, where nine out of 10 employers did not impose any requirements.

Despite increased employer interest in tying incentives to results, Aon Hewitt's survey shows room for improvement. More than 80% of employers provide an incentive to complete a health questionnaire, yet less than 10% provide an incentive to address the results of the questionnaire. Additionally, more than 60% of employers provide an incentive to complete biometric screening, but less than 10% provide an incentive to take any action.

Aon Hewitt surveyed nearly 2,000 U.S. employers, who cover more than 20 million U.S. employees and their dependents.